The data and analytics division of Black Knight Financial Services (formerly the LPS data and analytics division) has introduced VeraStrat Scores, a loan-level indicator of borrower risk and historical payment patterns.
According to the company, servicers can use the solution to create borrower contact strategies that assist the servicer in complying with various guidelines by identifying and contacting the highest-risk borrowers early. Servicers can assign collection staff to contact those borrowers who consistently make payments but missed their normal payment day.
A VeraStrat Score is a three-digit number, with the first digit indicating the risk segment and the latter two digits representing the historical payment pattern for the loan. Black Knight notes that the risk segment is assigned using the same approach that investors use: evaluating the probability of default and the potential severity of loss if the loan goes to foreclosure.
VeraStrat Scores can be delivered directly to the client or accessed through MSP, Black Knight's mortgage and consumer loan servicing platform.
Specifically, Black Knight notes that VeraStrat Scores may be able to benefit those servicers affected by the recent announcement from Freddie Mac that it will no longer offer its EarlyIndicator software as of March 29.